Assignment
Problem 1
The following amounts were taken from the accounting records of Russell Services, Inc. as of Dec 31, 2009. Russell Services began its operations on January 1, 2009.
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1. Interest Expense
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$ 2,000
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2. Land
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$ 98,000
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3. Miscellaneous Expense
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$ 8,000
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4. Taxes Expense
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$ 22,000
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5. Rent Expense
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$ 28,000
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6. Fees Earned
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$300,000
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7. Salaries Expense
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$ 87,000
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8. Dividends
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$ 13,000
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9. Cash
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$ 62,000
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10. Notes Payable
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$ 30,000
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11. Capital Stock
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$ 30,000
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12. Utilities Expense
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$ 40,000
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Instructions:
1. Prepare an income statement for the year ending December 31, 2009.
2. Prepare a retained earnings statement for the year ending December 31, 2009.
3. Prepare a balance sheet as of December 31, 2009.
4. Prepare a statement of cash flows for the year ending December 31, 2009.
Problem 2
At the end of August, the first month of operations, the following data was taken from the financial statements of LDP Consultants, Inc.
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Net income for August
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$ 85,000
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Total assets at August 31
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$ 650,000
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Total liabilities at August 31
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$ 200,000
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Total stockholders' equity at August 31
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$450,000
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In preparing the financial statements, adjustments for the following data were overlooked:
1. Unbilled fees earned at August 31 $ 5,200
2. Depreciation of equipment for August $3,500
3. Prepaid insurance expired for August $750
4. Accrued wages at August 31 $ 2,000
Instructions:
Based on the accounting equation, determine the effect of each omitted adjustment to net income, total asset s, total liabilities, and total equities. In addition, determine the correct amounts after adjustments for the accounts mentioned above.
Net Income Total Assets =Total Liabilities+ Total Equity
Reported Amounts $ 85,000 $ 650,000 $ 200,000 $450,000
Adjustment #1
Adjustment #2
Adjustment #3
Adjustment #4
Corrected Amounts
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.